TASMANIA
Inquiry into Parliamentary Salaries and Allowances
by
The Full Bench of the Tasmanian Industrial Commission
ISSUES PAPER
Members
Tim Abey (President)
Nicole Wells (Deputy President)
Michael Roberts (Commissioner)
September 2015
Inquiry into Parliamentary Salaries and Allowances by the Full Bench of the
Tasmanian Industrial Commission – September 2015
Issues Paper
Contents
1
Introduction ................................................................................................................................. 1
2
Matters to be Determined .............................................................................................................. 2
3
The 2014 Report .......................................................................................................................... 3
4
Role of an MP ............................................................................................................................... 4
5
The Basic Salary ........................................................................................................................... 5
6
Mechanism for the Future Adjustment of Salary...............................................................................12
7
Additional Salary for certain Office Holders .....................................................................................12
8
Motor Vehicle Allowance ...............................................................................................................15
9
Electorate Allowance ....................................................................................................................16
10
Committee Sitting Fees ................................................................................................................18
11
Telecommunications Allowance......................................................................................................20
12
Entertainment Allowance ..............................................................................................................21
13
Away from Home Travelling Allowance ...........................................................................................22
14
Bass Strait Islands Traveling Allowance ..........................................................................................23
15
Taxi Allowance ............................................................................................................................23
16
Resettlement Allowance................................................................................................................23
17
Submissions and Public Hearings ...................................................................................................25
Written Submissions ....................................................................................................................25
Oral Representations ....................................................................................................................25
Submissions to be Public Unless Otherwise Indicated .......................................................................25
Final Report ................................................................................................................................26
Secretariat ..................................................................................................................................27
Appendix 1 .........................................................................................................................................28
Role of a Parliamentary Backbencher and Considerations for Salary Determination (2013 Issues Paper –
section 8) ...................................................................................................................................28
The Role of an MP (2014 Report - section 4.2).................................................................................30
Appendix 2 .........................................................................................................................................33
Changes to Basic Salary 1996 to 2015............................................................................................33
Appendix 3 .........................................................................................................................................34
Mechanisms for Future Adjustment (2013 Issues Paper - section 10) .................................................34
Future Adjustment of the basic salary (2014 Report - sections 4.12 and 4.13) ....................................36
i
ii
Inquiry into Parliamentary Salaries and Allowances by the Full Bench of the
Tasmanian Industrial Commission – September 2015
Issues Paper
1
Introduction
The Parliamentary Salaries, Superannuation and Allowances Act 2012 (PSSAA) provides
for the basic salary of Members of the Tasmanian Parliament (MPs).
It also provides for additional salary payable to some MPs for the various offices to which
they are appointed (eg President of the Legislative Council, the Speaker of the House of
Assembly, Minister of the Crown, etc). These are specified in Part 2 of Schedule 1 of the
PSSAA.
Further there is a range of allowances and benefits specified in Schedule 2 of the PSSAA
to which MPs may be entitled.
Up until recently the PSSAA did not provide a mechanism by which the salaries and
allowances could be varied. The salaries and allowances were ‘frozen’ at the levels that
were in effect from 1 July 2013.
The PSSAA did provide for a Tribunal1 established by an Order-in-Council dated 26 June
2013 to review the basic salary and allowances payable to MPs. A Tribunal (the 2013
Tribunal) was established and it did prepare a report of its review (the 2014 Report).
The 2014 Report was tabled in Parliament on 3 June 2014. The 2014 Report made
recommendations about the basic salary to be applicable from 1 July 2014 and 1 January
2015 and a proposed approach to future adjustments. It also made recommendations
about the current allowances and the establishment of a new allowance – a Resettlement
Allowance.
These recommendations were not implemented.
Any implementation required
amendment to the PSSAA. Neither the Government nor a private MP introduced any
legislation to do so.
However an Amendment Act, the Parliamentary Salaries, Superannuation and
Allowances Amendment Act 2015 (the 2015 Act) was passed by the Parliament and
received Royal Assent on 13 July 2015.
The amendments provided for by the 2015 Act set the basic salary of an MP to be
$120 835 pa from 1 July 2015 and established that a full bench of the Tasmanian
Industrial Commission (the Commission) must from then on periodically inquire into,
report on and make determinations about the salaries and allowances to which MPs are
entitled.
Any future amounts of the basic salary, additional salaries and allowances of MPs after
30 June 2016 are to be determined by the Commission.
The first report of the Commission, including a determination about these matters, is
required to be tabled in Parliament by 1 March 2016.
Unlike for the 2013 Tribunal, a determination of the Commission under the amendments
to the PSSAA made by the 2015 Act will be implemented automatically unless within 10
This Tribunal was similar to and had been preceded by other Panels, Tribunals and Committees of Review
established in 1995, 1999 and 2006 for similar purposes.
1
1
sitting days of the determination being tabled (or within a longer period if a House so
resolves), both Houses pass a resolution requesting that the determination be disallowed
(and so not be implemented).
If a determination is not disallowed, the Commission will gazette a notice setting out the
determination which will specify the amounts of the basic salary, additional salary
payable to the Premier, Deputy Premier, Ministers of the Crown, Secretary to Cabinet
and Certain Officers of the Parliament, and the allowances and benefits to which MPs are
entitled.
If a determination does not come into effect when it is due to, because it has not been
made, or the disallowance period has not expired, or it has been disallowed, the basic
salary, additional salary, and the allowances and benefits to which MPs are entitled
immediately before the determination was due to take effect continue until a new
determination is made.
If a determination is disallowed the Commission has 12 months from the date of
disallowance to make a new determination.
The members of the Commission for the purpose of making the first determination are
Mr Tim Abey (President of the Commission), Ms Nicole Wells (Deputy President) and
Mr Michael Roberts (Commissioner).
2
Matters to be Determined
The PSSAA as amended by the 2015 Act provides for the Commission to:
(i)
review and determine the amount of basic salary payable to a MP;
(ii)
review and determine the amounts of any additional salary payable to the
Premier, Deputy Premier, Ministers of the Crown, Secretary to Cabinet and
Certain Officers of the Parliament provided for in Part 2 of Schedule 1 of the
PSSAA;
(iii)
consider if there are any other offices of the Parliament not currently provided for
in Part 2 of Schedule 1 of the PSSAA that the Commission may decide require to
be paid additional salary and determine the amounts of any additional salary
payable for such offices;
(iv)
review the entitlements of and benefits to MPs provided for in Schedule 2 of the
PSSAA (ie Motor Vehicle Allowance; Electorate Allowance; Committee Sitting
Fees; Telecommunications Allowance; Entertainment Allowance; Away From
Home Travelling Allowance; Bass Strait Islands travelling Allowance; and Taxi
Allowance) including whether they remain appropriate to the needs of MPs, and
determine the amounts of those allowances and benefits still considered
appropriate; and
(v)
consider whether there are any new entitlements, allowances or benefits
considered appropriate to the current needs of MPs and determine the amounts of
such entitlements, allowances and benefits.
Under the PSSAA, the Premier also may require that some matters related to the
matters listed above be considered by the Commission as part of its inquiry. The
Commission must inquire into these related matters. Any requirement from the Premier
must be tabled in Parliament. To date, no requirement has been received from the
Premier in relation to this determination.
In making its first determination the Commission has to also inquire into and report on
the report of the 2013 Tribunal.
2
In making a determination the Commission has also to specify a due date for the next
determination to be made. The period of a determination may extend beyond one year
(but not be for a lesser period).
3
The 2014 Report
The 2014 Report is available at www.tic.tas.gov.au
The key recommendations contained in that report were:
Basic Salary
(i) The basic salary to be: $124 000 pa from 1 July 2014 and $128 000 pa from
1 January 2015;
(ii) From 1 July 2015 and 2016, the basic salary be adjusted in line with movements in
the Wage Price Index (WPI) for Tasmania; and
(iii) In 2016-17 there be further review by an independent tribunal, with a view to any
changes taking effect from 1 July 2017.
Motor Vehicle Allowance
The existing arrangements concerning the provision of a fully maintained motor vehicle,
or the payment of an allowance, to continue, but with the allowance to be adjusted in
line with movements in the Consumer Price Index (CPI), rather than the basic salary.
Telecommunication Allowances
(i) The existing arrangements in relation to the provision of equipment
reimbursement of 80 per cent of mobile telephone charges to continue.
and
(ii) The existing arrangement for home land line telephone services to be replaced with
an allowance of $50 per month.
Committee Sitting Fees
(i) Sitting fees for members of Standing Committees to be abolished from 1 July 2014.
(ii) Sitting fees for Committee Chairs to continue but include the Chairs of all Standing
and Select Committees.
Away From Home Travelling Allowances
Apart from a minor change to ensure consistency with the State Service provision, the
existing arrangements to continue.
Bass Strait Travelling Allowance
This allowance to remain unchanged.
Taxi Allowance
This allowance to be abolished.
Entertainment Allowance
This allowance to continue unchanged.
Electorate Allowance
3
Existing allowances to be increased by 2.76 per cent effective from 1 July 2014 and in
future be adjusted in line with the CPI rather than the basic salary.
Resettlement Allowance
Introduce a new Resettlement Allowance to provide for the payment of 12 weeks’ salary
to eligible MPs defeated at a General election, or who lose party endorsement. To be
eligible a MP must meet the following criteria:
(i) An MP must have served at least one full term immediately prior to an election, and
be defeated at a subsequent election or lose party endorsement.
(ii) A MP elected at a by-election or a recount will not be eligible until they have served at
least one full term.
(iii) A MP who chooses to resign from one House or electorate and nominate for another
House or electorate (other than as a consequence of electoral reform) and are
subsequently defeated is not eligible for the resettlement allowance.
As mentioned above the recommendations contained in the 2014 Report were not
implemented. Without specific amendment to the PSSAA the recommendations of the
2013 Tribunal about salaries and allowances had no legal effect.
The amendments to the PSSAA by the 2015 Act require that the first inquiry and report
of the Commission under that Act must include consideration of the 2013 Tribunal
report.
The 2014 Report, and an Issues Paper2 that preceded it, contain some significant
research material which might be useful for current inquiry. In particular the report
considered:
(i)
The history of Salary Determination for Tasmanian MPs
(ii)
A discussion of the role of a MP
(iii)
The history of changes to the basic salary
(iv)
A discussion about appropriate mechanisms for adjustments to the basic salary
(v)
Comparative information about salaries
(vi)
Activity indicators and statistical information
Individuals and organisations intending to make submissions to the Commission may
find this report useful background information.
4
Role of an MP
The Issues Paper and 2014 Report considered the role of an MP.
paper reproduces relevant sections from those documents.
Appendix 1 to this
It is likely that the role of an MP is still as described in the previous report, but the
Commission would be interested in any submissions about this issue with a particular
focus on whether any changes to the role impact on the salaries and allowances that
should be paid to MPs.
2
Review of Parliamentary Salaries and Allowances Issues Paper - October 2013
4
5
The Basic Salary
The basic salary is provided for in the PSSAA3 and, in essence is the salary paid to all
MPs and does not include any additional payments such as ministerial loadings,
superannuation and electorate allowance.
As of 1 July 2015, the basic salary is $120 835 pa. Prior to the 2015 Act the basic salary
was fixed at $118 466 pa, which was set from 1 July 2013.
The history of changes to the basic salary from 1996 to 2015 is shown at Appendix 2.
The 2013 Tribunal prefaced the 2014 Report with the following observation:
“In terms of public perception, there is never a good time to review the salary
and benefits for Members of Parliament.
We are aware from media coverage that the Government is facing a challenging
budgetary position and is urging restraint on all sectors of Government activity.
Against this background, the easy way through would be to adopt the
Government wages policy, a position urged by a number of organisations that
made submissions to this review, including the then State Government.
We have chosen an alternative course, as to do otherwise would serve to
perpetuate an inequity and unfairness, and simply delay public cynicism and
rancor to another day.
We have endeavored to identify arrangements that will end this public disquiet
once and for all, and ensure that into the future, salaries for MPs will be adjusted
in line with wage movements for the wider community, which includes the public
sector.
To achieve this position we must, however, establish an appropriate base and
that is not possible by the application of the Government wage policy [2% salary
increase].”
As is required by the PSSAA, the Commission is required to revisit the 2014 Report4, and
that will include testing the sentiment expressed above against prevailing circumstances
today.
The following statistical analysis compares the salary paid to a Tasmanian MP with other
State, Territory and Commonwealth Parliaments, relevant wage and price indexes, and
representative State Service positions.
It is to be noted that any salary increase granted will not operate prior to 1 July 2016.
Accordingly, where known and relevant, salary comparison data up to that date are
included.
Table 1 compares the basic salary of a Tasmanian MP with the MPs of other State,
Territory and Commonwealth Parliaments as at the current date and 1 July 2013.
3
4
See Part 1 of Schedule 1 to the PSSAA
See section 3E(2) PSSAA
5
Table 1 – Comparison of basic salary of Members of Australian parliaments
Jurisdiction
Commonwealth
Australian Capital
Territory
Basis of determination
The Remuneration and Other Legislation Amendment Act 2011 (Cmwlth)
requires the Remuneration Tribunal determine base salary for members of
Parliament. In May 2014 the Tribunal issued Determination 2014/10
which set the base salary for MHRs and Senators at $195,130. The
determination determined no annual adjustment. Reconfirmed by
determination 2015/06 in May 2015.
Determined by the ACT Remuneration Tribunal under Remuneration
Tribunal Act 1995 (ACT). The current Determination is number 2 of 2015.
Basic salary
as at 1 July
2013
$pa
Current basic
salary
$pa
Percentage
change
195 310
195 310
Nil
125 259
136 758
9.18%
146 251
153 280
4.8%
143 122
147 416
3.00%
(from August 2013)
153 312
(from 1 Jan 2016)
7.12%
144 485
148 848
3.00%
The Remuneration Tribunal released a report on the review of
entitlements for members of the Australian Capital Territory Legislative
Assembly in April 2014.
New South Wales
Northern Territory
Parliamentary Remuneration Act 1989 (NSW) establishes the
Parliamentary Remuneration Tribunal. The Tribunal determines salaries
up to the amount prescribed in the government’s wages policy. The most
recent Determination is 2015 Annual Report and Determination, 28
August 2015.
The basic salary of Assembly members is determined by the NT
Remuneration Tribunal under the Assembly Members and Statutory
Officers (Remuneration and Other Entitlements) Act (NT). Prior to
amendments in April 2015 the basic salary was tied to the annual rate of
increase in the salary of NT Public Service (NTPS) employees.
Current determination - No 1 of 2015 dated 29 July 2015.
Queensland
The Parliament of Queensland and Other Acts Amendment Act 2015
changed the power of the Queensland Independent Remuneration
Tribunal established under the Queensland Independent Remuneration
Tribunal Act 2013 (QIRT Act) to determine the basic salary.
Following this amendment a determination now may not increase the
basic salary by a rate that is higher than the rate of increase to the salary
or wage of public service employees. The Act also revoked a
determination 7/2015 that awarded a 2.58% increase in April 2015
6
Jurisdiction
South Australia
Tasmania
Basis of determination
Parliamentary Remuneration Act 1990 (SA) describes the linkage with
federal base salary and establishes the SA Remuneration Tribunal which
determines other entitlements.
Parliamentary Remuneration (Basic Salary) Amendment Act 2012 (SA)
states that from 1 July 2012 SA MPs basic salary will be $42,000 less
than federal base salary.
The Parliamentary Salaries, Superannuation and Allowances Act 2012
(Tas) as amended in 2015 sets the basic salary from 1 July 2015 at
$120 835 pa.
Basic salary
as at 1 July
2013
$pa
Current basic
salary
$pa
Percentage
change
153 130
153 130
Nil
118 466
120 835
2.00%
140 973
145 277
3.05%
148 638
154 223
3.76%
The Act provides for the future determinations of basic salary (and other
salaries and allowances) to be undertaken by a full bench of the
Tasmanian Industrial Commission. Determinations subject to
disallowance if both Houses of Parliament so decide.
Victoria
Western Australia
The Parliamentary and Public Administration Legislation Amendment Act
2013 (Vic), sets a MP’s salary as $140,973 from 1 July 2013 with an
increase of 2.5% from 1 July 2014. From 1 July 2015 salary is to be
adjusted by the relevant index published by the ABS on Victorian adult
average weekly ordinary time earnings.
As determined by WA Salaries and Allowances Tribunal (established by
the Salaries and Allowances Act 1975 (WA))
Most recent determination of the Salaries and Allowances Tribunal for the
Remuneration of Members of Parliament 23 June 2015
7
Table 2 shows the change in salary levels of the various Australian parliaments since
1996.
Table 2 - Comparison of basic salary for each Australian Parliament 1996 -2015
Parliament
Basic salary as at
30 June 1996
Basic salary as at
1 July 2015
% increase 1996
to 2015
Commonwealth
80 251
195 130
143.4%
ACT
58 264
136 758
134.7%
NSW
79 751
153 280
92.2%
Northern Territory
77 251
147 416
90.8%
Queensland
79 751
148 848
86.6%
South Australia
78 251
153 130
95.7%
Tasmania
68 372
120 835
76.7%
Victoria
79 751
145 277
82.2%
Western Australia
79 453
154 223
94.1%
Average of all
Parliaments excluding
Tasmania
76 590
154 280
101.4%
% differential from
Tasmania
12.0%
27.7%
Average of all State and
Territory Parliaments
excluding Tasmania
76067
148 419
% differential from
Tasmania
11.3%
22.8%
95.1%
In terms of comparison with other jurisdictions, it is arguable that the State and
Territory Parliaments are more relevant than the Commonwealth Parliament. In this
context it is noted that whilst Tasmania has historically been lower than the average of
the other jurisdictions (11.3% lower in 1996), the relative position of Tasmanian MPs has
declined further to 22.8% lower in 2015. Put another way, salaries in all other
jurisdictions have increased at a faster rate than for Tasmania over the past 20 years.
This relative position is not, however, unique to MPs. As the following table [Table 3]
shows, average weekly earnings (AWE) in Tasmania have invariably been below the
national position.
8
Table 3 - Average Weekly Ordinary Time Earnings F-T Adults [trend] Australia
and Tasmania 1996 – 20155
Date
Australia
Tasmania
% differential
May 1996
$672.80
$630.00
6.8%
May 2005
$994.70
$841.30
18.2%
May 2010
$1251.30
$1085.00
15.3%
May 2015
$1484.50
$1289.30
15.1%
It is to be noted that the current differential in average weekly earnings (AWE) of 15.1%
compares with a differential of 23.1% for Tasmanian MPs compared with their interstate
colleagues.
Table 4 analyses changes in the basic salary with the Consumer Price Index [CPI] and
relevant wage indices applicable to the Tasmanian workforce generally.
Table 4 - Comparison between Basic Salary, Consumer Price Index [CPI],
Average Weekly Ordinary Time Earnings [AWOTE], and Wage Price
Index [WPI].
Date
Basic salary
$pa
CPI All groups
Hobart6
AWOTE Full
Time Adults
(Tasmania)
$pw7
WPI
Tasmania8
1 July 1996
68 372
67.7
630.00
1 July 2005
90 957
83.5
841.30
86.2
1 July 2010
111 633
95.8
1085.00
104.9
1 July 2015
120 835
105.1
1289.3
120.9
% change since
July 1996
76.7%
55.2%
104.7%
% change since
July 2005
32.8%
25.9%
53.3%
40.3%
% change since
July 2010
8.2%
9.7%
18.8%
15.3%
It is noted that salary increases for Tasmanian MPs have lagged behind that applicable to
the wider workforce over time and has been approximately half the rate of increase over
the past five years. Indeed salary increases for MPs have not kept pace with inflation
over the past five years.
5
6
7
8
Source
Source
Source
Source
ABS
ABS
ABS
ABS
Catalogue
Catalogue
Catalogue
Catalogue
6302.0
6401.0
6302.0
6345.0
9
Table 5 compares salary movements for Tasmanian MPs with representative State
Service positions.
Table 5 - Comparison Between Basic Salary and Representative State Service
Positions
Date
Basic
Salary
A &C level
12/TSSA
Band 8 R12
Registered
Nurse
L.1
year 8
Teacher
B1 Level 12
Police
Commander
Level 1
1 July 2005
90 957
76 658
50 926
62 815
89 183
1 July 2010
111 633
95 630
64 842
78 509
114 776
1 July 2015
120 835
111 4659
76 249
92 49610
145 88411
% change since
1 July 2005
32.8%
45.4%
49.7%
47.3%
63.6%
% change since
1 July 2010
8.2%
16.6%
17.6%
17.8%
27.1%
Again a picture that emerges is that salaries for Tasmanian MPs have increased at a
lesser rate than the State Service and has been less than half the rate of increase over
the past five years.
Government Wages Policy
Although not expressly stated, it would seem that the Tasmanian Government wage
policy provides for salary increases of 2% pa. Certainly this is the level of increase
reflected in most registered industrial agreements over recent years.
There are however exceptions. For example paramedics and salaried medical
practitioners in the State Service have, following extensive proceedings before the
Industrial Commission, gained salary increases in excess of this figure.
Demographics, Budget Outlays and Activity Indicators.
The 2014 Report referred to an analysis of demographics, budget outlays and certain
activity indicators across the various parliaments. These indicators assisted the 2013
Tribunal in formulating the recommended relativity between the Tasmanian MP and the
other parliamentary jurisdictions. It is unlikely that these indicators have changed in any
material respect.
Operative 3/12/2015
Operative 1/7/2016
11
Operative 1/3/2016
9
10
10
2014 Report
In 2014 The Tribunal found:
(i)
The role of an MP in the Tasmanian Parliament is broadly similar to that of the
other State and Territory Parliaments, but less similar to the Commonwealth.
(ii)
Since the 1997 review, the Tasmanian basic salary has lost significant relativity
against the other State and Territory Parliaments.
(iii)
AWE in Tasmania has also lost relativity with the national position over the
period, but to a lesser extent than the basic salary.
(iv)
The basic salary has increased at a significantly lesser rate than State Service
positions over the past five or ten years.
(v)
Over the previous five years the increase in the basic salary has been less than
inflation [CPI], whereas the wider workforce has enjoyed real wage increases of
close to twice the rate of inflation.
As noted earlier, the 2014 Report recommended a salary increase to $128 000 pa, to be
phased in over six months in two instalments. If accepted, this salary would have still
been the lowest of a State or Territory Parliament. The recommendation was not,
however, accepted.
Considerations
If anything, the position of a Tasmanian MP relative to other parliamentary jurisdictions,
salary movements in the wider workforce and the state service, has deteriorated
marginally since the 2014 Report. It follows that the observations and conclusions from
that report remain relevant today.
There seems little contrary argument to the notion that salaries for MPs should move
broadly in line with wage and salary movements for the wider community. It is however
arguable that the base in Tasmania is below what it should be in work value terms, and
not to correct that position will perpetuate an inequity.
Hence submissions are invited on the following key issues:
1. Was the recommended salary of $128 000 pa from January 2015 appropriate in
light of the considerations taken into account? [Note that next adjustment will not
be before July 2016]
2. If the answer to 1 above is yes, is there reason to depart from a similar
conclusion on this occasion? For example, it might be that a salary level of this
order [allowing for timing questions] be considered appropriate in work value
terms, but beyond the financial capacity of the State to accommodate. If so, is
there a case for a ‘catch up’ to be phased in over an extended period.
3. Was the 2014 recommendation wrong? If so, what alternative approach is
preferred?
11
6
Mechanism for the Future Adjustment of Salary
2014 Report
This was discussed in detail in the 2014 Report and preceding Issues Paper. Section 10
of the Issues Paper and Sections 4.12 and 4.13 of the 2014 Report are reproduced in
Appendix 3.
The options canvassed were:
(i)
Linkage with State Service
(ii)
Linkage with relevant ABS Wage/Earnings index.
The recommendation of the 2013 Tribunal was to link adjustments of the basic salary to
Wage Price Index (WPI) for two years followed by a further review by an independent
Tribunal (to be established for that purpose).
Considerations
A determination by the Commission under the PSSAA may be for a period of not less
than one year. Any determination over multiple years is likely to require that the basic
salary (and maybe some allowances and benefits) not remain static for the entire period
of a determination.
The determination could establish the basic salary and include an adjustment mechanism
such as a linkage to another reference salary or a relevant ABS Wage/Earnings index.
Alternatively explicit dollar or percentage increases due on identified dates could be
specified in the determination itself.
Before a determination expires, the Commission is required to undertake a new inquiry
and make a fresh determination, which would include re-setting the relevant salaries and
allowances.
The Commission seeks submissions about appropriate adjustment mechanisms to
include in a multi-year determination, should one be made.
The Commission
determination.
7
also
seeks
submissions
on
the
preferred
period
of
its
first
Additional Salary for certain Office Holders
Current provisions
The PSSAA12 prescribes the additional salary payable to the Premier, Deputy Premier,
Ministers of the Crown, Secretary to Cabinet and Certain Officers of the Parliament. The
additional salary is specified as a percentage of the basic salary.
Additional salary for office holders did not form part of the terms of reference of the
2013 Tribunal.
The current entitlements to Additional Salary in Tasmania are shown in Table 6.
12
See Part 2 of Schedule 1 of the PSSAA
12
Table 6 - Additional Salary for MPs who are office holders
Office
Additional Salary
(percentage of basic
salary)
Additional
Salary
(dollar amount)
Premier
115
138 960
Deputy Premier
82
99 085
Minister
70
84 585
Secretary to Cabinet
30
36 251
President
35
42 292
Leader for the Government
70
84 585
Chair of Committees
20
24 167
Deputy Leader for the
Government
35
42 292
Speaker
35
42 292
Chair of Committees
20
24 167
Leader of the Opposition
70
84 585
Deputy Leader of the
Opposition
35
42 292
Government Whip
6
7 250
Opposition Whip
6
7 250
Leader of a recognised nongovernment party, other than
the Opposition
35
42 292
Government
Legislative Council
House of Assembly
Table 7 provides a comparison of the additional salaries paid to various office holders in
the different Australian jurisdictions.
13
Table 7 - Comparison by parliamentary jurisdiction of additional salary entitlements (expressed as a percentage of basic
salary) for selected offices
Office
Cmwlth13
ACT14
NSW15
NT16
Qld17
SA18
additional
salary22
additional
salary
additional
salary
First
Minister24
160
110
Deputy
First
Minister
105
Ministers
72.5
Tas19
Victoria20
WA21
expenses
of office
additional
salary
additional
salary
additional
salary
expenses
of office
additional
salary
expenses
of office23
additional
salary
expenses
of office
additional
salary
95
45
100
154.7
100
5.4
115
12
100
42
127.2
80
76
27
80
123.8
85
4.5
82
85
21
93.5
70
67
26
65
108.3
75
3.8
70
75
18
77.1
75
2.1
35
6
65
12
77.1
6
65
12
63.6
18
63.6
57.5
57
President
75
57
26
Speaker
75
55
57
26
65
92.8
75
2.1
35
Leader of
Opp
85
70
57
26
65
108.3
75
3.8
70
75
Most
Senior
Govt Whip
26
10
13
7
15
54.2
18
6
18
17.3
Most
Senior
Opp Whip
23
10
13
7
15
23.2
18
6
11
17.3
13
14
15
16
17
18
19
20
21
22
23
24
41
Remuneration Tribunal Report Number 1 of 2015 and Determination 2015/06
ACT Remuneration Tribunal Determination 2 of 2015
Parliamentary Remuneration Act 1989 (NSW) - Schedule 1
Northern Territory of Australia Remuneration Tribunal Report and determination no 1 of 2015 - Schedule 1
Queensland Independent Remuneration Tribunal Determination 7/2015
Schedule of Parliamentary Remuneration Act 1990 (SA)
Parliamentary Salaries, Superannuation and Allowances Act 2012 (Tas) – Schedules 4 and 6
Parliamentary Salaries and Superannuation Act 1968 (Vic) – Section 6 Table
Salaries and Allowances Tribunal (WA) remuneration of Members of Parliament - Determination 23 June 2015 section 2.3
All additional salary and expenses of office expressed as a percentage of basic salary in that jurisdiction
Entertainment Allowance
Prime Minister, Premier or Chief Minister as appropriate
14
Considerations
As can be seen from Table 7 some jurisdictions provide for a specific expense of office
allowance as well as the defined amount of additional salary. Some jurisdictions have a
range of additional salary points for Ministers depending on seniority or the attachment
of additional responsibility such as Leader for or Manager of Government Business in a
House.
Submissions are invited as to whether or not the existing additional salary amounts in
Tasmania are appropriate.
One aspect of the terms of the Commission’s inquiry is to consider if there are other
offices of the Parliament that are currently not remunerated with additional salary. Many
of the other jurisdictions pay additional salary for other offices not remunerated in
Tasmania, for example Parliamentary Secretary or Shadow Minister. These ‘offices’
though are administrative constructions in Tasmania and not currently recognised in the
Constitution or the PSSAA – unlike the office of Secretary to Cabinet for instance25.
The references cited for Table 7 provide sources of information about the type of offices
that are paid additional salary in other jurisdictions, and the amount of that additional
salary.
Submissions are invited as to whether there are offices in Tasmania for which the
payment of an additional salary amount maybe appropriate, but for which additional
salary is not currently provided.
8
Motor Vehicle Allowance
Existing provision
Each MP is entitled to be paid a Vehicle Allowance of $15 305 pa26. However, Members
may elect, in lieu of the Allowance, to be provided with a fully maintained, private plated
vehicle for parliamentary, electorate and private use, but not for commercial purposes.
The standard of vehicle is that which is generally available to State Servants at SES
Level 1. Members are responsible for the running costs of the vehicle when used outside
Tasmania.
New State Service Arrangements
Recently27 there has been a change to the motor vehicle arrangements applicable in the
Tasmanian State Service to Senior Executive officers and Heads of Agencies.
Subject to the offer being made by the Head of Agency (in the case of SES Officers) or
the Secretary, Department of Premier and Cabinet (in the case of Heads of Agencies),
officers, other than those who are members of the Retirement Benefits Fund (RBF)
Defined Benefit Scheme, may elect to receive an annual allowance in lieu of a fully
maintained private plated motor vehicle. The current quantum of this allowance in lieu
of a motor vehicle is $15 700 pa for SES Officers at 1 and 2 and $16 900 pa for officers
at SES level 3 and above and Heads of Agencies.
2014 Report
The 2013 Tribunal proposed in future that variations to the Motor Vehicle Allowance
should be linked to CPI rather than the basic salary. It recommended an adjustment to
the allowance of 2.76% from 1 July 2014 taking it to $15 419 pa. This allowance was to
25
26
27
See section 8F of the Constitution Act 1934 (Tas)
See clause 1 of Schedule 6 of the PSSAA
See State Service Act Employment Direction No 17 dated 27 April 2015
15
be adjusted on 1 July each year to reflect the change in the CPI, Hobart, All Groups
between the March quarter in that year and the March quarter in the preceding year.
No change was recommended to the arrangements for taking a fully maintained private
plated motor vehicle in lieu of the allowance.
Consideration
The Commission invites submissions as to the adequacy or otherwise of this benefit and
whether the recommendation of the 2013 Tribunal should be confirmed, or the new SES
allowance be adopted or some other approach be taken.
9
Electorate Allowance
Existing provision
The amounts of the existing electorate allowances are specified in clause 2 of Schedule 6
of the PSSAA. These are shown in the following table (Table 8).
Table 8 – Current Electorate Allowances for Tasmanian MPs
Electorate(s)
Allowance (per annum)
Group 1
Apsley
$48 473
Group 2
Murchison, Western Tiers
$44 644
Group 3
Derwent, Huon
$38 266
Group 4
Montgomery, Rumney
$35 716
Group 5
Mersey, Rosevears,
Windermere, Elwick,
Nelson, Launceston,
Pembroke, Hobart
$30 614
Bass
$42 094
Braddon
$45 920
Denison
$30 614
Franklin
$36 991
Lyons
$51 024
Legislative Council
House of Assembly
This entitlement and the basis from which the current amounts are derived was subject
to an in-depth review by the Committee of Review established in 2006.
The amounts of the Allowance were significantly increased at that time and a number of
other allowances were eliminated.
Generally speaking, the purpose of Electorate Allowances is to cover expenses incurred
by MPs in servicing the electorate, other than those expenses specifically covered by
16
other allowances. The Report of the 2006 Committee of Review identified the following
expense items that might appropriately fall within the purview of the Electorate
Allowance. This is not necessarily an exhaustive list.

Accommodation expenses when travelling within the electorate

Postage, including newsletters

Pamphlet drops

Professional development in all its forms

Communication with the electorate, surveys, focus groups etc

Upgrading to a non-standard vehicle. e.g. 4WD

Commissioning research projects

Entertainment

Attendance at community, business, education and sporting functions

Subscriptions and donations to charitable, sporting and social organisations
within the electorate

Advertisements of the Member's parliamentary activities within the electorate

Home office expenses

Internet access fees

Taxi fares
The Electorate Allowance was not designed to cover every expense which might be
considered desirable or justifiable. Rather, it was designed to provide for flexibility and to
allow MPs to make informed choices as to where their priorities might lie within the
constraint of the available funds. For example, an MP might choose to fund an electorate
survey rather than overseas study conference or electorate newsletter.
The 2014 Report
The 2013 Tribunal was informed that the restructured allowance has worked
satisfactorily, particularly in terms of administrative efficiency. Each MP must justify to
the Australian Taxation Office the legitimacy of expenditure from the Electorate
Allowance.
The Tribunal also noted in passing at the time that controversy which has been evident
in a number of Australian Parliaments concerning ‘expenses’ charged to the taxpayer has
been notably absent from the Tasmanian Parliament.
The majority of submissions to the 2013 Tribunal indicated that the allowance was
‘adequate’ but invariably fully expended.
There were some suggestions that the
disparity between geographically large and small electorates was too great given that a
vehicle had been provided at the time of the 2006 review. However this was strongly
refuted by other submissions pointing to the need for such things as additional travel
involving overnight stays, a disproportionate number of schools, community groups and
community newspapers which are part and parcel of serving a larger electorate.
The 2013 Tribunal noted that Electorate Allowances in other jurisdictions invariably bear
a direct relationship with the geographic size of the electorate.
17
The Tribunal recommended that the existing allowances be adjusted from 1 July 2014 in
line with the change in the CPI (2.76%), with any future annual adjustments linked to
the increases in CPI. However the 2013 Tribunal went on to note that the relativity of
the amounts of the various allowances may well be an appropriate matter for
consideration at the next triennial review 28.
Consideration
The Commission seeks submissions about whether there is reason to depart from
recommendation of the 2013 Tribunal.
10
Committee Sitting Fees
Existing provision
The PSSAA29 provides for Committee sitting fees on the following basis:
A member of a Standing Committee is paid a daily sitting fee for each day on which a
member attends a summoned meeting of the Committee, according to the following
scale:
(i)
In the case of a Chair of a Committee, at the rate of 0.12% of the annual basic
salary (currently equivalent to $145 per day)
(ii)
In the case of any other member, at the rate of 0.10% of the annual basic salary
(currently equivalent to $121 per day).
The 2014 Report
The 2013 Tribunal noted that
(i)
The sitting fee is paid on a daily basis irrespective of the time occupied by the
meeting. From the information available to the Tribunal, the time occupied for
each meeting ranges from 15 minutes (sometimes by teleconference) up to five
or more hours. Typically a committee meeting would be in the range of 45
minutes to two hours.
(ii)
Sitting fees are only payable to members and Chairs of Standing Committees as
distinct from Select Committees. There did not appear to be a logical explanation
for this distinction, other than an historical basis.
(iii)
Committee work is very much part of the core role of an MP in the same manner
as participating in parliamentary debates, attending briefings etc is. However the
role of a Committee Chair can be an onerous one and is something over and
above that expected of a Committee member. This is recognised by all
Parliaments of Australia in one form or another.
The sitting fee rates payable for Committee Chairs in Tasmanian were significantly less
than those applicable in any other parliamentary jurisdiction in Australia. A comparison
of current committee fees/additional salary is shown in Table 9.
The 2013 Tribunal envisaged that there would be a review of the salaries and allowances to which MPs are
entitled by another independent Tribunal established for that purpose in 2016-17, with a view to
recommending changes to be effective from 1 July 2017.
29
See PSSAA Clause 3 of Schedule 6
28
18
Table 9 - Committee Fees/Additional salary – Australian Parliaments
Parliament
Chair30
Member
Commonwealth31
$5 854 (3%) -
NA
$31 221 (16%)
ACT
$13 676
32
NA
public affairs committee
NSW33
Northern Territory
34
$195 per day (but not if
$4 515
remunerated as an office holder)
Public Accounts only
$30 662
35
South Australia
Tasmania39
$15 331 (10%)
scrutiny committee
$57 538
$23 031
$21 438 (14%) -
$15 313 (10%) -
$26 032 (17%)
$18 376 (12%)
$145/day (0.12%)
$121/day (0.1%)
Standing Committees
Standing Committees
$7 264 (5%) -
NA
Queensland37
38
(20%)
scrutiny committee36
Victoria
40
$21 792 (15%)
Western Australia41
$14 864
$10 405
Standing Committee
Standing Committee
The 2013 Tribunal recommended that:

The daily sitting fee for a member of a Standing Committee is to be abolished
with effect from 1 July 2014.

The Chair of a Standing or Select Committee to be paid a daily sitting fee
equivalent to 0.12% of the annual basic salary for each day on which the Chair
attends a summoned meeting of the Committee. This allowance is to take effect
from 1 July 2014.
Consideration
The Commission seeks submissions about whether there is reason to depart from
recommendation of the 2013 Tribunal
Note: Commonwealth, WA and Victoria have additional salary for Deputy Chairs.
Remuneration Tribunal Determination 2015/06 Table 1
32
ACT Remuneration Tribunal Determination 2 of 2015, section 3
33
Annual Report and Determination of Additional Entitlements for Members of the NSW Parliament 28 August
2015 section 4.3
34
Northern Territory of Australia Remuneration Tribunal Report and determination no 1 of 2015 – Schedule 1
35
From 1 January 2016
36
Excludes House, Privileges, Standing Orders and Members’ Interests
37
Queensland Independent Remuneration Tribunal Determination 3/2014
38
Parliamentary Remuneration Act 1990 (SA) – Schedule
39
Parliamentary Salaries, Superannuation and Allowances Act 2012 (Tas) clause 3 Schedule 6
40
Parliamentary Salaries and Superannuation Act 1968 (Vic) section 6 Table
41
Salaries and Allowances Tribunal (WA) Remuneration of Members of Parliament - Determination 23 June
2015 Section 2.3
30
31
19
11
Telecommunications Allowance
Existing provision
The PSSAA provides that there is payable to each MP a Telecommunications Allowance
as follows:42
“(2) The Allowance is to be paid by way of reimbursement of –
(a) service and equipment charges for one telephone service installed in
the member of Parliament's home, and 80% of all call charges
applicable to that fixed line; and
(b) 80% of all charges for a mobile telephone – except as outlined in
subclause (3).
(3) The Allowance in respect of a mobile telephone for the holder of the
offices of the President of the Legislative Council, Speaker of the House
of Assembly, Leader of the Opposition and Leader of a recognised nongovernment party, is to be unlimited.”
The 2014 Report
The 2013 Tribunal also noted that in addition to this allowance, each MP has access to a
Members’ Resource Allowance (MRA) of $7 500 pa. This allowance is provided under a
policy decision of the Government through a budget allocation. It is not provided as a
legislated provision under the PSSAA.
The MRA has been used for the purpose of purchasing hardware items, such as a smart
phone, tablet (iPad), laptop computer and docking station. The 2013 Tribunal was also
informed that the MRA may also be used to fund the data component of these devices.
The MRA is not paid directly to the member but is administered on a ‘draw down’ basis.
If the allowance is not fully expended in any year, the unspent balance reverts to
consolidated revenue. From the information available to the Tribunal, the Resources
Allowance is adequate for the purpose it is intended for.
The 2013 Tribunal was informed that mobile phones are administered on the basis of a
‘whole of parliament’ contract. Members are sent an account, on a regular basis, for 80%
of the data and call charge applicable to that phone. In 2013 there appeared to be
widespread satisfaction with this arrangement.
In relation to home landline services, the advent of ‘bundled’ accounts has made it very
difficult to identify ‘service and equipment’ charges for a home telephone and often
people have dispensed with a ‘traditional’ landline all together.
In 2013 less than half of members appeared to submit claims for reimbursement for the
costs of a home telephone service. The Tribunal recommend the replacement of existing
arrangements with a standard monetary allowance of $50 per month, but only where
there was evidence provided that a home landline was installed at the MP’s home.
42
See Clause 4 of Schedule 6 of the PSSAA
20
The full recommendation of the 2013 Tribunal in relation to the Telecommunications
Allowance was that there shall be payable to each MP a Telecommunications Allowance
consisting of the following:

80% of all charges for a mobile telephone; and

$50 per month for costs associated with a landline home telephone service
(subject to evidence that a home phone is installed).
The 2013 Tribunal did not recommend that there be any change to the allowance in
respect of a mobile telephone for the holder of offices of the President of the Legislative
Council, Speaker of the House of Assembly, Leader of the Opposition and Leader of a
recognised non-government party. It was to remain unlimited.
Considerations
Telecommunications and technology are changing rapidly and it is not difficult to
envisage the day when fixed line home telephones will no longer be a reimbursable
component of any telecommunications package.
The Commission seeks submissions from MPs and interested parties about the form any
future telecommunications based allowance should take.
12
Entertainment Allowance
Existing provision
The Premier, President of the Legislative Council and the Speaker of the House of
Assembly are entitled to an Entertainment Allowance 43, which is specified as a
percentage of the basic salary (Table 10).
Table 10 – Entertainment Allowance, Tasmanian Office Holders
Office
Allowance
(% of basic salary)
Premier
12%
President of the Legislative Council
6%
Speaker of the House of Assembly
6%
The 2014 Report
Submissions received by the 2013 Tribunal generally supported the continuation of this
allowance and the Tribunal recommended no change.
Consideration
The Commission invites submissions as to whether there are any reasons to depart from
the recommendation of the 2013 Tribunal.
43
See Clause 5 of Schedule 6 of the PSSAA
21
13
Away from Home Travelling Allowance
Existing Provision
In the PSSAA the Away from Home Travelling Allowance is expressed in the following
terms44:
“(1) There is payable to a Member of Parliament an Away From Home Travelling
Allowance for expenses incurred while travelling on official parliamentary
business.
(2)
The rate of the Allowance is to be calculated in accordance with the Travel
Allowance and Meal Allowance components prescribed from time to time by
the Tasmanian State Service Award of the Commission.
(3)
Where a Member of Parliament exceeds the Allowance to which he or she is
entitled, the member may, subject to any guidelines issued from time to
time by the Government, claim an allowance by way of reimbursement of
expenses, at the rate equivalent to the actual expenses incurred, on
submission of documentary evidence of those expenses.
(4)
The Allowances referred to in subclauses (2) and (3) are mutually exclusive
and a member must claim either the Travelling Allowance referred to in
subclause (2) or the reimbursement of actual expenses referred to in
subclause (3).”
The 2014 Report
The 2013 Tribunal did not propose any substantive change to this provision. It noted
there was no evidence that MPs require a more generous arrangement than that
applicable to State Servants. As such the question of adequacy is better served through
the normal Award mechanism.
In a submission to the Tribunal the CPSU had observed that under the current wording
the allowance may be read to entitle MPs to meal allowances for day travel, which does
not generally apply to “Public Service workers”. Although the Tribunal did not consider
that this was an accurate reading of the allowance, it sought to avoid any doubt, by
recommending an amendment to the provision to ensure that both the rates and
conditions from the Tasmanian State Service Award apply.
The wording proposed was that “The rate of and the circumstances under which the
allowance is payable shall be in accordance with the Travel Allowance and Meal
Allowance components prescribed from time to time by the Tasmanian State Service
Award of the Commission.”
Consideration
The Commission invites submissions as to the adequacy or otherwise of this entitlement
and whether there is reason to depart from the recommendation of the 2013 Tribunal.
44
See clause 6 Schedule 6 of the PSSAA
22
14
Bass Strait Islands Traveling Allowance
Existing provision
The Bass Strait Islands Traveling Allowance45 provides that a MP travelling to the Bass
Strait Islands on official Parliamentary business is entitled to an allowance equivalent to
the reimbursement of expenses incurred.
The 2014 Report
The 2013 Tribunal found that this provision had universal support, and it should continue
in the current form.
Consideration
The Commission invites submissions as to whether there are any reasons to depart from
the recommendation of the 2013 Tribunal.
15
Taxi Allowance
Existing provision
The PSSAA46 provides that in order to avoid the necessity for a ministerial driver to be on
call, a taxi allowance is payable to a Minister by way of a voucher.
The 2014 Report
The 2013 Tribunal accepted the view of the then State Government that it was sensible,
where cost effective, for a Minister to travel in a taxi after a function or other official
duty, rather than keep a ministerial driver on hold. However this should be an
administrative practice rather than be a specified ‘allowance’ in the PSSAA.
Consideration
The Commission invites submissions as to whether there are any reasons to depart from
the recommendation of the 2013 Tribunal.
16
Resettlement Allowance
Issue
When an MP loses his or her seat in Parliament, payment of salary and other benefits
such as the use of a car and mobile phone, ceases immediately. MPs have no entitlement
to a redundancy payment nor do they have accrued leave to fall back on. It is
understandable that the sudden loss of a seat will often give rise to a financial shock
which, under existing arrangements, is not in any way cushioned.
The concept of a ‘Resettlement Allowance’ is now a feature of all Australian Parliaments
other than NSW and Tasmania. In essence the allowance is designed to assist former
MPs to move from political life to private life. The determination of the West Australian
Salaries and Allowances Tribunal of 10 August 2012 provides a summary of reasoning for
a Resettlement Allowance:
“This allowance is to facilitate a Member’s transition from public office to private
life. This allowance will assist a Member to access resettlement advice and services
including financial counselling, re-employment counseling, out-placement services,
educational and training costs and any other costs a member deems necessary.
45
46
See clause 7 of Schedule 6 of the PSSAA
See clause 8 of Schedule 6 of the PSSAA
23
The Resettlement Entitlement is not intended to apply at a time a Member resigns
in order to nominate for a position in another House of Parliament and is
subsequently appointed as a Member of the other House.”
Table 11 provides information about the Resettlement Allowances provided by Australian
parliaments. Currently Tasmanian MPs do not have an entitlement to a Resettlement
allowance.
Table 11 - Resettlement Allowance in Australian Parliaments
Jurisdiction
Arrangements
Commonwealth47
3 months basic salary plus an additional 3 months for
a member who has served more than full term.
Eligible if defeated at an election or loses party
endorsement.
ACT48
2 weeks of base salary for each year of service,
capped at 12 weeks. All retiring and/or defeated MPs
eligible.
NSW
Nil
Northern Territory49
1 month of salary after one term as a Member of the
Assembly, plus one month for each subsequent year
served as a Member with a minimum of four months
and a maximum of 12 months.
Queensland50
Members elected on or after 1 October 2014 - 12
weeks of basic salary.
Members elected before 1 October 2014 – equivalent
to Commonwealth resettlement allowance.
South Australia51
12 weeks of basic salary.
Tasmania
Nil
Victoria52
3 months’ salary at the basic rate plus an additional 3
months’ salary if member has served in more than
one consecutive parliament. Eligible if defeated at an
election or loses party endorsement.
Western Australia53
3 months of base salary for MPs serving one term.
6 months of base salary for MPs serving more than
one term but less than three.
9 months base salary.for MPs serving three terms or
more.
Remuneration Tribunal Determination 2012/04 Members of Parliament – Entitlements - Sections 9.6-8
ACT Remuneration Tribunal Determination 2 of 2015, section 5
49
Northern Territory of Australia Remuneration Tribunal Report and determination no 1 of 2015 – section 15
50
Legislative Assembly of Queensland - Members Remuneration Handbook July 2015 section3.2.3
51
Parliamentary Remuneration Act 1990 (SA) – section 5A
52
Parliamentary Salaries and Superannuation Act 1968 (Vic) - section 7E
53
Salaries and Allowances Tribunal (WA) Remuneration of Members of Parliament - Determination
23 June 2015 Part 8
47
48
24
2014 Report
The 2013 Tribunal considered that there is a compelling case for a Resettlement
Allowance in Tasmania.
The Tribunal recommended that from 1 July 2014 MPs be entitled to a Resettlement
Allowance equivalent to 12 weeks at the basic salary subject to meeting the following
criteria:
1. Members have served at least one full term immediately prior to an election, and
2. Are defeated at a subsequent election or lose party endorsement.
3. Members elected at a by-election or a recount will not be eligible until they have
served at least one full term.
4. Members who choose to resign from one House or electorate and nominate for
another House or electorate (other than as a consequence of electoral reform)
and are subsequently defeated are not eligible for the resettlement allowance.
As with all the recommendations of the 2013 Tribunal this proposal has not been
implemented.
Several jurisdictions (Queensland, WA and NT) have updated their
resettlement allowances since the 2013 Tribunal reported.
Consideration
The Commission invites submissions as to whether the recommendation of the 2013
Tribunal or some other construction of a resettlement allowance should be adopted.
17
Submissions and Public Hearings
The Commission invites written submissions and/or oral representations from interested
parties (individuals or organisations) on the matters raised in this Issues Paper, or
related subjects.
Written Submissions
The closing date for written submissions is Friday 23 October 2015. Electronic format
(email) is strongly preferred.
Oral Representations
The Commission may hold public hearings to hear first-hand from those individuals and
organisations who wish to make an oral presentation, or supplement a written
submission. Subject to demand the Commission will sit in convenient locations around
the state.
If required public hearings will take place in the week of 2 November 2015.
To facilitate sitting arrangements, individuals or organisations intending to make an oral
representation should contact the Secretariat not later than 16 October 2015.
Submissions to be Public Unless Otherwise Indicated
The default position is that submissions and oral representations will be public.
However, should any individual or organisation wish to make a private submission or oral
representation, the Tribunal will respect such wish, provided it is clearly indicated.
Similarly, written submissions will be placed on the Tasmanian Industrial Commission
web site, unless the author indicates otherwise.
25
Final Report
Under the PSSAA54, the final Report of the Commission is to be tabled in Parliament
before 1 March 2016.
54
See PSSAA section 3E(1)
26
Secretariat
Contact details for the Secretariat are as follows:
Ms Clare Jacobs
Phone: (03) 6165 6775
Email: tic@justice.tas.gov.au
2nd Floor
144 Macquarie St
Hobart 7000
GPO Box 1108
Hobart Tas 7001
Internet: www.tic.tas.gov.au
27
Appendix 1
Role of a Parliamentary Backbencher and Considerations for Salary
Determination (2013 Issues Paper – section 8)
Parliamentarians are not employees and hence comparisons with the wider workforce
must be placed in proper perspective. There are not designated hours of work.
Normal workforce entitlements such as annual and long service leave do not accrue
so as to be available on termination. We do however understand that MPs may take
leave during the parliamentary term as opportunity offers. Similarly, there is no
equivalent of a redundancy payment in the event that an MP loses party endorsement
and/or fails to be re-elected. Note: Federal MPs are entitled to a Resettlement
Allowance" equivalent to three months' salary in such circumstances.
The 1997 Report, in identifying 'significant issues', noted:
" The submissions and observations of members of the Tasmanian Parliament and
the Tasmanian Government show general unanimity regarding both their
comparability with Federal Parliamentarians and their duties and responsibilities.
In particular, concerning the latter and without being exhaustive, the submissions
and comments emphasise the unrelenting nature of constituent demands;
pressure and stress associated with Parliamentary and Ministerial functions; loss
of privacy and disruption to family life; the seven days a week nature of the job,
irrespective of whether or not Parliament is sitting; lack of job security; and costs
associated with elections and servicing electorates."
In relation to Federal parliamentarians, the Remuneration Tribunal Report 2011
observed:
" The role of a parliamentarian is an unusual one, with a high level of complexity
and difficulty. They have in effect two jobs, at least. One role is as a member
of a legislature which sits for approximately 20 weeks a year in what is to most
parliamentarians a city a long way from home. In this role they have to process
large amounts of information over long working days and make decisions on a
variety of issues. For instance, Parliament passed 159 Acts in 2008, 136 in
2009 and 150 in 2010. A member of the Parliament for those three years thus
had to consider, and vote on, some 445 different pieces of legislation on a wide
variety of subjects, not taking into account those that were withdrawn or did not
pass through the Parliament. As well, it is almost universal that members have
a significant role as holders of additional offices and/or as members of various
parliamentary committees.
The second role of the parliamentarian is as the representative of all the
residents of his or her electorate, however they vote. In the case of a
senator, they represent the state or territory from which they were elected.
This is also a challenging task, which fills the 32 weeks when they are not in
Canberra, as well as a significant portion of the weeks when they are."
The report went on to identify a number of principles relevant to the determination of
salary and allowances. They are:
" The Tribunal in considering both personal remuneration of the individuals who
serve in Parliament, and how best their parliamentary and electorate business
should be supported by public funding, has relied on a number of principles.
These include:
•
parliamentary remuneration (like other remuneration determined by the
Tribunal) should be set based on the role and responsibilities of a
parliamentarian;
•
parliamentary
remuneration should be sufficient to allow representation
28
from various members of society with a diverse range of skills, including
those who are in the middle of their careers and those with responsibility
for supporting others;
•
parliamentary remuneration should be sufficient so that
the highest
standards of integrity are maintained; it should not, however, be so
high that the remuneration itself becomes the overriding attraction
with no regard for the concept of public service;
•
parliamentary remuneration should be clearly
not be any hidden benefits;
•
funding
for the business expenses of parliamentarians should be
sufficient so that parliamentarians can fulfill their functions adequately
without having to fund their parliamentary and electorate expenses from
their own pockets;
•
available funding should be clear and easy to understand for
parliamentarians, those administering the funding, and the public at
large; and
•
in setting funding levels the Australian experience, that parliamentarians
from different electorates across the
country have vastly different
challenges in servicing their electorates, must be taken into account."
expressed - there should
In a similar vein the Western Australian Salaries and Allowances Tribunal in its August
2013 report observed:
" In exercising its statutory responsibilities, the Tribunal applies broad principles
upon which levels of remuneration are determined for all categories of offices
and positions within the scope of the SAA Act. These principles, particularized
to Members of Parliament, have been applied by the Tribunal to make
judgments with respect to the remuneration in this determination. These
principles are:
•
the value of a parliamentary position to the State under our democratic
system of government:
•
measures of the 'work value' of Members of Parliament and various offices
held by Members in the Parliament; and
•
the level of remuneration
environment of wage and
community.
of Members
salary rates
within the context
applying generally
of
in
the
the
The Tribunal is conscious of the position of Parliamentarians in our democratic
system and that the remuneration of Members should not preclude people from
all walks of life from aspiring to enter Parliament."
The Remuneration Tribunal Report 2011 was based on a comprehensive work-value
assessment of a Federal backbench MP. Key findings include:
•
The majority of members have post-secondary or tertiary education, with a
significant number having experience in business, in agriculture or a
profession prior to entering Parliament.
•
MPs on average work 70 hours per week.
•
A Backbencher needs computing skills and a capacity to prepare
correspondence and respond to constituents, who send on average, over
1000 emails each week.
•
A Backbencher is responsible and accountable for at least four staff and an
Electorate Office budget of between $500 000 to $1m.
29
•
The role of a Backbench MP remains broadly similar to that described in the
1988 study, though subsequent to that time the demands on members from
24/7 media and the level and speed of communication sponsored by the new
electronic age has placed significant new demands on all Backbench
Parliamentarians.
•
House of Representatives members represent Electorates with between
85 000 and 130 000 electors.
•
The careers of MPs are becoming shorter, generally lasting no more than 12
years. From Federation through to the 1980s the average length of an MP's
service was in the range of 16 to 17 years.
•
Federal MPs share a collective responsibility for a Commonwealth budget of
approx. $400b.
•
The work value of a Backbench MP was found to be equivalent to a
substantive Level 1 Senior Executive Service (SES) position in the Australian
Public Service (APS). This is equivalent to a role in the APS of a key
executive or specialist advisor in a major Department.
A further consideration is the relevance of size (constituency, budget etc) to salary
determination for MPs. For example, is the number of constituents in a Members
Electorate a relevant consideration in 'work value' terms? On the one hand it might be
argued that if an MP is working full-time, it makes no difference whether there is 20 000
or 120 000 constituents in the Electorate. The work is the same. On the other, it could
be argued that the greater the number of constituents, the greater the level of
responsibility, complexity and accountability. A similar argument might be mounted in
terms of the size of the shared budget responsibility.
An example of this latter approach is found in Tasmanian Local Government
Municipalities are categorised based on a formula involving the number of voters and
total revenue. Allowances paid to elected councilors are scaled on the basis of this
categorisation. That is, the 'larger' the Council, the higher the allowance paid.
It is of course accepted that the role of an MP is not limited to Parliamentary sittings
and Committee work. Constituency based work when parliament is not sitting is an
integral part of an MP's role. However is the balance between Parliamentary sittings and
constituency work relevant to a work value consideration?
Put another way, if
parliamentary sitting days reduce (or increase), does this impact on the level of
responsibility and accountability for an MP?
The Role of an MP (2014 Report - section 4.2)
Unlike the public and private sectors, there is no specific job description attached to the
role of an MP. Not surprisingly, MPs come from a range of backgrounds and have
differing skills experience and qualifications.
The role of an MP has been discussed in a number of publications including the Egan
Report55 and more recently the Queensland Independent Remuneration Tribunal
Determination (Queensland Determination No 1/2013).56 The work can be categorised
into three components:

Parliamentary work;

Electorate representation; and

Engagement with a political party (if a member)
The Attributes, Role and Reward of a Backbencher in the Federal Parliament [November 2011] Egan
Associates
56
Building a new remuneration structure for Members of the Queensland Parliament, Queensland Independent
Remuneration Tribunal, Determination 1/2013, 15 October 2013
30
55
The Queensland Determination No.1/2013 described these roles as follows:
“ An MP’s role within their electorate involves engaging with and representing
their constituents in a variety of forums such as community organisations,
public committees and parliament itself. MPs also have an electorate office,
supported by electorate staff, which is used as a key contact point for all
constituents within their electorate. MPs generally receive and are required to
respond to correspondence from constituents covering a broad range of
issues, and will often use print and social media to communicate directly with
their constituents on issues that affect them. They are also often called upon
to investigate and to mediate disputes between organisations and members
within their electorate and are looked to as a leader within the communities
they represent.
In relation to parliament, an MP’s role principally involves debating public
policy and legislation that comes before parliament and its committees. Many
MPs also undertake other formal roles either within parliament or within the
executive (e.g. Committee Member, Whips, Leader of the House, Speaker,
Minister or Assistant Minister, Leader of the Opposition and Premier). MPs are
expected to attend parliament on all sittings days unless excused from
attendance and are often required to work late into the evening, or early
morning to debate policy and legislation.
For MPs who are members of a political party, their role also covers
involvement in branch meetings, state conferences and parliamentary party
meetings to debate and agree upon party policy. The role of an MP may be
described as:

a representative of the people in their electorate who must play an active
role in their community; listening and providing advice to, and advocating
for their constituents

providing a direct link between their electorate and parliament

advocating on behalf of their constituency

contacting and supporting the communities within their electorate

performing parliamentary functions as a member of the Legislative
Assembly, such as debating legislation, scrutinising the actions of the
executive government through asking questions on notice or without
notice and making speeches, particularly on topics that affect their
constituency

serving on parliamentary committees, as required, to examine specific
issues and legislation that comes before parliament

participating in internal party processes where applicable.”
Allowing for nomenclature differences, we believe the above adequately describes the
role of the Tasmanian MP, with the added dimension of promoting Tasmania and
advocating on behalf of the State.
The then State Government submission noted that, in relation to electorate work,
constituents have an expectation that MPs with whom they interact, in addition to being
fully aware of matters before the Tasmanian Parliament, also have an understanding of
the principal activities of the Australian Government and the operational role of local
government within their electorate.
In many, perhaps most respects, the fundamental role of an MP has not changed
significantly since the 1997 Report although the 24/7 media cycle has increased the pace
of the analysis and examination of parliamentary activity and the work of MPs. The then
State Government submission noted:
31
“ In common with many other public figures throughout Australia, Members are
subject to increasing public scrutiny – sometimes of their private as well as
their public lives.
Modern communications encourages and facilitates
immediate public scrutiny of parliamentary and party discussions and
decisions. Members can be expected to be available to comment on issues as
they are evolving often without any time to reflect on questions. The ability
and constant requirement to deal with the media, mainstream and social, is a
developing competency that is another factor in determining an appropriate
level of remuneration.”
As an example, we were told that previously the public expectation for a response to
correspondence was in the region of two weeks. With the widespread advent of email,
that expectation had reduced to ‘same day’.
Whilst the electronic age, 24/7 media cycle and social media has affected most aspects
of working life, we accept that the impact on MPs has been adversely disproportionate
compared to the mainstream workforce.
In terms of the desired skill set the then State Government observed:
“ Given the variety of activities that a Member of Parliament is expected to
undertake, he or she needs to possess a broad set of skills. These include:

Leadership skills;

Community representation skills;

Interpersonal skills;

Negotiation and influencing skills;

Debating skills;

Speaking in public;

Research and analytical skills;

IT related skills;

Chairing skills; and

Knowledge of the way government works.
To be fully proficient as a Member of Parliament it would be usual for
members to have a post-secondary or tertiary education or the equivalent
experience in business or a profession prior to entering parliament.”
The submission also noted that “the role of a Member of the Tasmanian Parliament is
broadly similar to that of members of other Australian Parliaments.” On the material
available to the Tribunal, we concur with this observation.
32
Appendix 2
Changes to Basic Salary 1996 to 2015
Date
Salary
$pa.
Increase
Comments
1/7/1996
68 372
1.26%
1997 Report sets basic
salary at 85.19% of
Commonwealth basic
salary
1/7/1997
69 733
1.99%
Commonwealth nexus
1/7/2000
72 837
4.45%
5% increase in
Commonwealth rate
1/7/2001
78 375
7.6%
Commonwealth nexus
1/7/2002
81 442
3.9%
Commonwealth nexus
1/7/2003
84 168
3.3%
Commonwealth nexus
1/7/2004
87 541
4%
Commonwealth nexus
1/7/2005
90 957
4%
Commonwealth nexus
1/7/2006
94 689
4%
Commonwealth nexus
1/7/2007
101 334
7%
Commonwealth nexus
1/7/2008
108 242
6%
Commonwealth nexus
1/7/2010
111 663
3%
Commonwealth nexus
1/7/2011
113 866
2%
Linkage with
Commonwealth broken
after Remuneration
Tribunal awards 31%
increase. 2% consistent
with State wages policy
1/7/2012
116 143
2%
PSSAA reflecting State
wages policy
1/7/2013
118 446
2%
PSSAA reflecting State
wages policy
1/7/2015
120 835
2%
PSSAA as amended by
the 2015 Act reflecting
State wages policy
For a detailed history of the basic salary since the inception of the Tasmanian
Parliament, see Appendix 1 of the 2014 Report.
33
Appendix 3
Mechanisms for Future Adjustment (2013 Issues Paper - section 10)
The Terms of Reference require the tribunal to determine "a formula or method to enable
the annual or other periodic adjustment of that salary..."
There are a number of mechanisms by which this can be achieved. The options are
discussed below.
Legislative enactment
The Parliament is at liberty to legislate both the quantum and means of adjustment of the
basic salary. This can be done in absolute terms, or by reference to some other index,
cap, or wage movement. There are number of different approaches to legislative
enactment which are summarised in the section covering salary determination in
Australian Parliaments.
The advantage of this approach is that it is easier for the Government of the day to
impose Government policy, including wage policy where applicable. The disadvantage is
that it raises the issue of Members of Parliament determining their own salary, an issue
which does not appear to enjoy widespread public support.
It also raises the
possibility/likelihood of politically based decisions such as the wage freeze and
subsequent 40% salary increase in the 1990s.
Linking the Salary to Wage Movements in the State Service
This approach has the advantage of ensuring that the basic salary moves in line with
salary movements for the State Public Service. The disadvantage is that the Government
(as distinct from the Parliament), is the employer of state servants, and through the
workplace bargaining process, is arguably setting, or at least strongly influencing, MP
salary movements.
A second disadvantage relates to difficulties with linkages generally. A linkage may be
suitable at a given point in time, but takes no account of changed circumstances in the
future. For example, the growth of enterprise bargaining and the attendant demise of
award based salary increases appears to have resulted in an unintended wage freeze for
MPs between 1991 and 1993. Other unforeseen changes might include a work value
change or new classification structure for state servants of no relevance to MPs.
A direct link of this nature exists by statute in the Northern Territory 57.
Government wages policy is similarly reflected by legislation.
In NSW,
Linking the Salary to the basic salary in the Commonwealth or other State or Territory
Parliaments
This has been a widespread practice in Tasmania and other jurisdictions for many years.
It suffers from the same disadvantage as discussed above for linkages generally. This
problem was graphically illustrated by the Remuneration Tribunal Report 2011 which
increased the salary for a Federal MP from $140 910 to $185 000, and at the same time
urged that existing linkages between state and commonwealth basic salaries be broken.
This linkage was broken in most jurisdictions in a range of different ways. However this
did not occur in Queensland58, resulting in a 41.9% increase for Queensland MPs.
Salary levels in Australian Parliaments are of course a relevant consideration as 'part of
the mix' when reviewing the basic salary in Tasmania. However for reasons outlined
above, a formal linkage of any description is problematic.
57
58
Now removed
Since then this has been addressed
34
Linking the Salary to a relevant ABS Wage/Earnings index
It is possible to link the basic salary, once established, to changes in a relevant ABS index.
A number of options are discussed below.
•
Average weekly earnings (AWE)
The AWE survey is designed to measure the level of average earnings at a
point in time. AWE statistics represent average gross earnings of employees
and do not relate to average award rates or to the earnings of the 'average
person.' AWE estimates are derived by dividing estimates of weekly total
earnings by estimates of the number of employees. Changes in the averages
may be affected not only by changes in the level of earnings of employees
but also by changes in the overall composition of the wage and salary earner
segment of the workforce.
There are several factors which can contribute to compositional changes,
including variations over time in the proportion of full-time, part-time, casual
and junior employees; variations in occupational distribution, and variations
in the distribution of employment between industries. Such effects may
apply differently within different states and territories, and over time. There
are three indices in this series:
•

Earnings, Persons, Full-Time, Total Earnings

Earnings, Persons, Full-Time, Ordinary Time Earnings (this excludes
overtime)

Earnings, Persons, Total Earnings (this includes, part-time, casual
and junior employees).
Wage Price Index (WPI)
The WPI is a price index designed to measure the change over time in the
price of wages and salaries. It does this by pricing specific jobs, in terms of
wage and salary payments to employees occupying those jobs.
It is
unaffected by changes in the quality and quantity of labour services
purchased by employers, changes in hours worked or changes in the
composition of the employee workforce.
The WPI is a better measure of changes in wage and salary movements for specific jobs,
as distinct from changes in average earnings. For example, an apprentice moving to a
tradesperson role might impact on AWE, but not the WPI, which measures the rate
(price) for apprentices and tradespersons as separate entities.
The WPI is favoured by the Fair Work Commission in considering National Wage matters.
In Victoria, AWOTE has been adopted in the relevant legislation for the determination of
the basic salary on 1 July 2015.
Periodic Reviews
As an alternative to a formal linking mechanism, the basic salary could be subject to
periodic reviews by an independent tribunal.
Under such a mechanism the
considerations referred to in this paper might all be 'in the mix' with none being binding
in absolute terms. That said, once the basic salary starting point is established, such
reviews (assuming they were on an annual basis), would be of a more limited nature
and would likely be finalised in a timely manner. It is an arrangement that appears to
work well in Western Australia.
An alternative to annual reviews might be to establish a formal linkage with an external
measure (ABS or State Service for example) for the two years following the initial
determination, with a wider ranging review say every three years.
35
The major advantage of periodic review (whether annual or less frequently) is that
circumstances which were not anticipated can be taken into account and unintended
consequences avoided.
Future Adjustment of the basic salary (2014 Report - sections 4.12 and 4.13)
The Notion of a Nexus or Linkage
In this section we discuss various options for a nexus or linkage. There are two aspects to
this consideration. Firstly, is it appropriate to use an external formal linkage in the
establishment of the basic rate, and secondly, whether a formal linkage should be used in
the ongoing maintenance of the basic rate, once established?
Commonwealth Parliament
Between the 1997 Report and 2012 Act the basic salary in Tasmania was formally linked
to the basic salary in the Commonwealth Parliament (85.19%). The 2012 Act broke this
linkage.
The Commonwealth Report 2011, in granting, inter alia, a 31.3% salary increase,
observed:
“ The Tribunal recommends that any existing linkages between the remuneration
of state and territory parliamentarians and assembly members and the base
salary of federal parliamentarians be severed on the basis that it cannot be
justified without a state or territory based work-value assessment similar to
that conducted for federal parliamentarians.”
Unlike the 1997 review, no individual or organisation contended that a formal linkage with
the Commonwealth be re-established.
We also note that this issue was canvassed in the Queensland Determination 1/2013 in
which the Tribunal concluded that:59
“ For various reasons that relate to difference in roles, the Tribunal concurs with
the assessment of Egan Associates and believes that State comparisons are
more valid than a comparison with the Commonwealth.”
We agree and conclude that there is no basis for a formal linkage with the Commonwealth
basic rate.
State and Territory Parliaments
The basic salary applicable in the various State and Territory Parliaments has always been
a significant consideration in the determination of the Tasmanian salary. Indeed, the 1973
Act fixed the Tasmanian salary by reference to the average of salaries paid in NSW,
Victoria, Queensland, Western Australia and South Australia. In 1983 NSW and Victoria
were removed from the averaging equation.
The relevance of State Parliaments was also to the forefront of consideration in the 1997
review, albeit coupled with localised considerations through the differential in average
weekly earnings between Tasmania and the national position.
We agree that the basic salary applicable in the State and Territory Parliaments remains a
significant consideration in the determination of the Tasmanian salary. However we do not
favour the establishment and/or maintenance of a formal arithmetic linkage. There is no
logical reason why Tasmania should be the average of (or bear any other arithmetic
relationship with) the other jurisdictions, however defined.
59
P 58
36
The other major issue is that it is a moveable feast. Since we commenced our
consideration there have been major independent reviews in Queensland and the ACT and
the WA review is underway.
In our view the salaries applicable in the State and Territory Parliaments are an important
component in the mix of a range of considerations to be taken into account.
The State Service
The CPSU submitted that the basic salary should be set and maintained at 202% of Band
3 Range 1 level 5 of the Tasmanian State Service Award.
The Greens proposed that the basic salary be set at 95.734% of Level 1, Range 1 of band
9 of the General Stream of the Tasmanian State Service Award.
It follows under both the CPSU and Greens proposals, that future adjustments be linked to
movements in the award classification.
The then State Government submitted that the existing salary be increased in line with
State Wages Policy and thereafter adjusted to maintain relativity with the salary
movements that are applicable to the general public sector in Tasmania. It was contended
that such an approach would:

be automatic and would not require direction intervention by MPs

be transparent and easy to understand and administer

be cost effective in that it would not require a large resource investment, such
as the establishment of a remuneration tribunal or extensive independent
analysis.
The HACSU, by inference, supported a salary adjustment in line with the State Service but
was silent on a future adjustment mechanism.
There was limited (and qualified) support for some form of linkage with the State Service
from a number of individual submissions.
The position of MPs (past and present) was almost universally opposed to any formal
linkage with the State Service.
We accept the positions advanced in a number of submissions that the role of an MP is
quite different to any level of the State Service. We respect the view of those proposing a
direct linkage to a particular State Service classification. However in reality, these
proposals do no more than accept that the existing salary level is correct and preserve the
existing arithmetic relationship (Greens 95.734%, CPSU 202%). It does not amount to a
considered finding as to comparability between an MP and a nominated State Service
position in terms of role, responsibility and work value. It may well be a convenient
approach, but it lacks the rigor deserving of a review charged with establishing a base
which will be sustainable into the future.
We do not favour any formal link with a State Service classification for the purpose of
establishing the basic salary.
That said, the level of salaries and wages paid in the wider State Service is part of the
overall consideration in determining the basic salary.
There is considerably greater force in the argument that a future adjustment mechanism
be linked to movements in the State Service. It is essentially the position that applies in
NSW and the Northern Territory, but not in any other jurisdiction.
The obvious advantage is that it ensures salary movements for MPs are in line with the
public sector generally, thus largely removing scope for public discontent.
A disadvantage is that the Government, as party to State Service wage negotiations,
might be perceived as indirectly determining, or at least significantly influencing, their own
salary outcomes. In reality, the checks and balances within the system means that it
37
would be extremely unlikely that this bargaining position would be used improperly or
mischievously (eg to achieve a favourable outcome for MPs would mean the same
outcome extending to at least 13 000 State Servants60, with the obvious budgetary
implications). Nonetheless, from the point of view of public perception, it is a consideration
which should not be ignored.
In the context of the above discussion we note the observations of the ACT Remuneration
Tribunal, with which we broadly agree.61
“ Section 4 of the Tribunal’s report outlines the difficulty of equating work value
of a Member with other Politicians around Australia and with the ACTPS. In
particular, the Tribunal is at pains to ensure that there is no direct linkage with
the ACTPS as it would be an inappropriate linkage. A deliberate decision has
therefore been made to ensure that there is no direct linkage or ongoing ‘tie’
with any other jurisdictional politician or public servant.”
A further disadvantage relates to difficulties with linkages generally. A linkage may be
suitable at a given point in time, but takes no account of changed circumstances in the
future. For example, the growth of enterprise bargaining and the attendant demise of
award based salary increases appear to have resulted in an unintended wage freeze for
MPs between 1991 and 1993. Other unforeseen changes might include a work value
change or new classification structure for State Servants of no relevance to MPs.
There is one further aspect that persuades us not to adopt a formal linkage with the State
Service.
State employment is a relatively small component (approx. 13%) of the total Tasmanian
workforce. In our view, if there is to be a linkage with external wage movements as part
of a mechanism for future adjustment, then that link should be with an appropriate index
applicable to the wider community, which includes, but is not limited to, the State Sector.
This aspect is discussed in the next section.
Linking the Salary to a relevant ABS Wage/Earnings index
It is possible to link the basic salary, once established, to changes in a relevant ABS index.
A number of options are discussed below.
Average Weekly Earnings (AWE)
The AWE survey is designed to measure the level of average earnings at a point in time.
AWE statistics represent average gross earnings of employees and do not relate to
average award rates or to the earnings of the ‘average person.’ AWE estimates are
derived by dividing estimates of weekly total earnings by estimates of the number of
employees. Changes in the averages may be affected not only by changes in the level of
earnings of employees but also by changes in the overall composition of the wage and
salary earner segment of the workforce.
There are several factors which can contribute to compositional changes, including
variations over time in the proportion of full–time, part-time, casual and junior employees;
variations in occupational distribution, and variations in the distribution of employment
between industries. Such effects may apply differently within different states and
territories, and over time. There are three indices in this series:
 Earnings, Persons, Full-Time, Total Earnings
 Earnings, Persons,
overtime)
Full-Time,
Ordinary
Time
Earnings
(this
excludes
 Earnings, Persons, Total Earnings (this includes, part-time, casual and junior
employees).
60
61
CPSU Submission p3
Final Report on the Review of Entitlements for Members of ACT Legislative Assembly, April 2014
38
Wage Price Index (WPI)
The WPI is a price index designed to measure the change over time in the price of wages
and salaries. It does this by pricing specific jobs, in terms of wage and salary payments,
to employees occupying those jobs. It is unaffected by changes in the quality and quantity
of labour services purchased by employers, changes in hours worked or changes in the
composition of the employee workforce.
The WPI is a better measure of changes in wage and salary movements for specific jobs,
as distinct from changes in average earnings. For example, an apprentice moving to a
tradesperson role might impact on AWE, but not the WPI, which measures the rate (price)
for apprentices and tradespersons as separate entities.
The WPI is favoured by the Fair Work Commission in considering National Wage matters.
In Victoria, AWOTE has been adopted in the relevant legislation for the determination of
the basic salary on 1 July 2015.
In commenting on the Victorian position, Michael Toby noted that this “neatly achieved
two objectives, it provided a reasonable formula for movements linked to the economy of
the State and it obviated the need for Parliament to consider future adjustments to the
salary.”
Periodic Reviews
As an alternative to a formal linking mechanism, the basic salary could be subject to
periodic reviews by an independent tribunal. Under such a mechanism the considerations
referred to in this Report might all be ‘in the mix’ with none being binding in absolute
terms. That said, once the basic salary starting point is established, such reviews
(assuming they were on an annual basis), would be of a more limited nature and would
likely be finalised in a timely manner. It is an arrangement that appears to work well in
Western Australia.
An alternative to annual reviews might be to establish a formal linkage with an external
measure for the two years following the initial determination, with a wider ranging review
say every three years.
The major advantage of periodic reviews (whether annual or less frequently) is that
circumstances which were not anticipated can be taken into account and unintended
consequences avoided.
39